Tough times ahead for local notebook makers: UBS

By Kevin Chen / Staff reporter

Fri, Oct 18, 2013 - Page 14

Taiwan’s contract notebook computer makers are likely to see their laptop shipments contract by a sequential rate of 5 percent this quarter, because of a higher comparison base last quarter, when they posted better-than-expected shipments, UBS Securities said yesterday.

The brokerage revised its forecast downward from its previous estimate of 3 percent sequential growth for this quarter because it sees weak demand ahead after PC brands became cautious in placing orders with Taiwanese contractors, UBS analyst Patrick Chen (陳鈞寧) said in a note.

The revision came after Intel Corp on Tuesday released its results for the July-to-September quarter, which were in line with Wall Street expectations. But with some PC vendors adopting a more cautious outlook in the past weeks, Intel said it expects revenue of US$13.7 billion, plus or minus US$500 million, for this quarter, which is lower than the median estimate of US$14 billion projected by analysts.

However, Chen said he remained cautious on the notebook sector this quarter because low order visibility means “downside risks” to market expectations of sequential shipment growth this quarter.

According to a report released by Taipei-based Digitimes Research on Wednesday, shipments from local notebook producers are expected to post a 5.9-percent decline this quarter from last quarter, bigger than a sequential fall of 3.2 percent for global notebook shipments, as Lenovo Group Ltd (聯想) plans to increase its in-house notebook production by 10 percentage points to 33 percent this quarter.

"Therefore, it will be a challenge for Taiwanese notebook makers to reach the goal of shipping 35 million units this quarter," Digitimes Research senior analyst Joanne Chien (簡佩萍) said in the report.

In contrast, Barclays PLC on Monday forecast that notebook shipments from the five Taiwanese contractors would grow 4 percent to 36.95 million units this quarter, although that was lower than its previous forecast of a 5 percent increase to 37.35 million units.